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Worldwide Exchange

Ross Westgate and Kelly Evans consider the business stories that have global significance.




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Us 31, Pfizer 27, U.s. 22, Russia 10, Cnbc 9, Astrazeneca 7, Europe 7, London 7, Merck 6, China 6, Japan 6, Washington 6, Uk 6, Ukraine 5, Katherine 5, Ross 5, Kazakhstan 5, United States 4, Astra 4, Geneva 4,
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  CNBC    Worldwide Exchange    Ross Westgate and Kelly Evans consider the  
   business stories that have global significance.  

    May 2, 2014
    4:00 - 6:01am EDT  

re. hello. you're watching "worldwide exchange," i'm ross westgate. your headlines from around the globe. sweetening the bid. pfizer tables 50 pounds a share for astrazeneca. astra's board will meet to discuss the offer. and rbs shares soar to the top of the market in london. and reports of casualties roll in as kiev launches a military operation to gain control in the east. the country's prime minister warns ukraine is entering its most dangerous ten days since
independence. and the u.s. economy is expected to show one of the biggest gains in hiring in months in april. with companies in all sectors putting out the help wanted signs. you're watching "worldwide exchange," bringing you business news from around the globe. a warm welcome to today's program. we kick off with the latest on manufacturing pmi. eurozone, april manufacturing pmi, 53.4, a little higher than the forecast 53.3. the march manufacturing pmi was 53. german april manufacturing pmi 54.1, slight tick weaker. french manufacturing pmi 52.1. that's better than the 50.9 expected. so the french economy continuing to improve. we were very worried about it at the end of last year.
italian april manufacturing pmi, slightly weaker pmi. euro/dollar, at a three-week high during the session yesterday, around 1.3890. very much within the ranges. joining us for the first part of the show, james butterfield, globe equity strategist. that's the latest data out on the eurozone. there are those who are looking at the valuations in the u.s. at the moment and saying compared to where the growth might come from, the relative merits, maybe european equities will be a better, better than the rest of the year than potentially the u.s. >> what's crucial is earnings, how it's becoming more and more important every quarter that goes on. the problem in europe at the moment is, there's been a earnings less recovery. we've seen a p/e expansion. that's been the case for two years. in the u.s. when we had the recovery post-credit crisis, we
saw a pickup in corporate confidence pmis. shortly after that, we saw a publicup in corporate earnings. in europe, we saw a rise of pmi in aggregate in june last year. we haven't seen a follow-up in earnings yet. so that's our concern. at what point do investors get fed up and say well, okay, if you're not seeing corporate earnings, we should pull our money out of europe. what we've seen in terms of investor flows, increasing appetite for europe and we being position with an overweight position for the last year. we're thinking is it now time to get out of i don't urp? . >> what will sway you on that? >> our argument about when are earnings going to be delivered is the difficult one. it's difficult to get the timing on this one right. we're at a point where mario draghi could fairly soon cut rates further. that will provide further stimulus to europe.
so we don't think the time is quite right yet to get out of europe. but certainly as each quarter rolls on -- >> if the ecb did do more, let's say they consider qe, would that be a negative for equities or not? >> i think further stimulus, typically, history suggests, it's very positive. >> i was going to say. >> yes, yes. >> okay, james, stay there. we have a lot of corporate news to get through. our top story, pfizer raised its bid for astrazeneca to $106 billion or 50 pounds a share. they have a larger cash component as well. astra will discuss the bid today. katherine boll johns us to talk through the details. it's getting juicy, katherine. >> yes, ross, this is more than an opening move by pfizer. it looks like it's not quite check mate.
there's something more expected to really seal the deal here. >> what are they talking about? what's the magic number? >> well, there are slightly different levels but it sounds like at least 52 is likely going to have to happen to seal the deal. also the cash element of the deal will have to be raised as well. the initial offer came in at 30.70. that today has been moved up to 32. shareholders are talking about raising it up to 50%. >> what do you think of this bid, joe, what is it telling us? >> corporate confidence is now translating into pickup in m&a. people have been predicting an m&a pickup for the last three years. it hasn't happened. why now? i think both political landscape both in the u.s. and europe has improved greatly. we don't have the u.s. elections
to get through. we haven't got the u.s. debt scene to roll through. the european credit crisis seems to have just calmed down. i suppose corporates now -- ceos they feel the land escape is a little bit more clear, that they can start empire building. >> in talks of the politics, how are the politics playing out in the uk? is it going to be any political opposition or not. >> i think there will be plenty of political opposition, ross, whether it transpires into actually meaning that anything happens as a result is another thing. we've got an election coming up next year. we have the labor party and the liberal democrats who are part of the government potentially being rested by this. of course what it means for uk science as a whole. the government seems to be pretty clinging to stress that it was hard-nosed in negotiations with pfizer, that it's got this commitment from pfizer to astrazeneca's r & d
side at cambridge, for example. what that means for british jobs is another thing. that has definitely trust between pfizer and stakeholders in the uk. >> all right. thank katherine. plenty more on katherine is writing the articles and keeping us up dated. we will be joined by a man who says astra investors should sit tight for another offer from pfizer. he's talking 54 or 55 even before astrazeneca should declare it's ours. right. that's what we have to do, the buy signal. let's show you where we stand with global equities. european equities anyway. the nonfarm payroll, around 6-3,
a little bit more than that, advancers outpace decliners. u.s. equities just down slightly at the close. the ftse 100 is up 0.3%, 28 points higher. this morning we are fairly flat as is the xetra dax. cac current is down a third. in russia, the micex is down a third as well. china still close because of a two-day holiday. they'll be back on monday. the nikkei slipping down 0.2%. the hang seng up 0.5%. the s&p sx. just take a net on this, 38 treasury yields 3.42% at the moment. we got down to 3.39%. the ten-year has been down to two-month lows, 2.59 was the yield during the session
yesterday. we're off those lows at the moment. but maybe a bit of a short squeeze going on in treasury markets. we'll talk about that during the show. on the currency markets, the dollar, cautious again ahead of nonfarm payroll. euro/dollar, 1.36 and dollar/yen 102.46. we keep our eyes on sterling, 1.69. up near a five-week peak. that's where we stand with currencies right now. meanwhile, let's bring you up to speed with the latest in ukraine. reports of casualties in eastern ukraine today after the country's military has launched a large operation to regain control of the town of
slovyansk. sources say pro-russian separatists have strengthened their hold on donetsk after taking another government building. prime minister yanukovych has warned ukraine it entering its most dangerous ten days as soon as it became independent in 1991. those developments come as warsaw prepares to host energy talks today with the energy minister and eu ministers from russia and ukraine. the german chancellor, angela merkel called vladimir putin to urge him not to interfere. she's also reportedly asked for the russian president's help to secure the release of the osc members being held by rebels. americale is set to discuss the crisis further when she meets with president obama in washington later. in poland, they seem to be taking an economic hit. data shows manufacturing expansion slowed to its lowest
level since last summer in april. and german bund yields dip to their lowest level in years. joining us with his thought, and james butterfield is still with us. >> i think the prime minister of ukraine is right. this is a dangerous period indeed. ukraine is scheduled to have a presidential election on the 25th of may. and it looks to me as though president putin is trying to do everything he can to disrupt that in the east of the country. and to keep the situation unstable. >> unstable but not out of control? >> well, out of the control of the kiev government. >> yes. >> it's interesting they've launched this -- >> russia doesn't want a civil war, though, do they? >> russia wants to have the maximum amount of influence that
it can over the situation in ukraine. i think that's increasingly clear. and what we don't know is just how far putin is prepared to push that. >> okay. but i would -- if this erupted, the worst case scenario is a civil war. i don't see how that would benefit russia necessarily. >> it depends -- >> it's right on their door step. >> it's right on their door step. you would think their interest would be in having a stable and prosperous ukraine on their door step. >> only if they could control part of it and it wasn't part of nato. i'm presuming that's their view. >> i think there's very little chance of it being a nato member in the short term. there's never been a majority of the ukrainian population in favor of that, unlike eu membership. it does seem to me that putin is playing with fire and that he issic maing the calculation that if he can't get the whole thing
peacefully, then instability is more in his interest than stable and western oriented ukraine. >> this is almost an impossible question to answer. how much control do you think russia has over the separatists in the eastern part of the country? and those units? >> quite a lot. there is a lot of evidence that many of the people that we see leading these separatist separations are, in fact, russians rather than ukrainians. and so i think the russians have considerable influence over the situation. >> what should the west and kiev be doing? should they be changing their tactics? >> ukrainians have launched operations in morning, that in itself is a dank, at least if they press it forward. one of the interesting things, almost the first thing they took back seems to be the television center in slovyansk.
i think that's a change of tactics in itself. >> i think for the west, we have had so far rather weak sanctions. there's an student to impose firmer sanctions as it becomes clearer that russia is in fact intervening in eastern ukraine. >> can i ask, i thought -- will it continue the unrest after the election, if a lot of these protesters are sort of governed by putin, it would be in his best interest to try and correct as much instability prior to the election, to garner greater sympathy, theoretically, for russia. clearly putin wants a democratic resolution rather than a war. so we could see post-election much more rest. what's your view on that. >> that would be the optimistic scenario. i think it's quite likely that the leading candidates after the election will not be pro-russian and, therefore, he will continue
to intervene and to destabilize the east in an effort to make it almost impossible for any government in kiev to control the situation there. and there is no pro-russian candidate who is doing well at the moment in the polls. >> ian, thank you. he's from the center for european reform. linkedin's results have disappointed. we'll look into the numbers. we'll also be out to kazakhstan's capital city of astana. and donald trump is expanding his global empire, buying up a golf course in scotland and the hotel, for what's a cup price deal. we'll find out how much he paid a little later.
rbs shares are soaring after the lender's net profit tripled in the first quarter, hitting 1.2 billion pounds, much better than estimates which had been around 200 million pound mark.
the company's crucial tier one capital ratio also improved. george hay joins us on the phone. good reaction from investors to the numbers. is it warranted? >> good morning. i think the main reason why the shares are up is because -- so much is because this is the first time in ages that rbs hasn't either presented a need strategy or a need disaster. so the numbers are good. but literally in the last six results they've produced, there's been an average 5% share price fall. and i think investors are just relieved that ross mcewen, the executive, is beginning to implement the new plan rather than unveiling something more unpleasant. >> some relief that maybe we're getting some stability. how much more pain is there
still to come from regulatory investigations, litigate and uncertainties around those issues? >> well, that's a key uncertainty. there are any number of things that rbs and all the other banks are still being kind of fingered for. probably the key thing with rbs is that -- indicators came out with a new five-year plan to turn around the bank. and steven hester, his predecessor, had one of those as well. the point for rbs investors, even though they've had good results, this is a good start for ross mcewen, he's already said in february that it will take him a long time to turn the bank around. he stopped paying dividends. that's a key sign for when the bank can start returning to the private sector. >> they did say they expect a modest uncrease in its net
interest margin as obviously an improvement in the uk economy. >> yes. >> that presumably, you can read that across the sector. >> yes. i mean, all banks should be now reducing their bad debt quite substantially. they should be gaining from the improvement in the economy and the housing market. .big question hanging over the sector is what happens when interest rates go up? that's the key question for anyone looking at the uk economy. but it clearly will affect banks disproportionately. >> nathan bostalk is leaving. do we know who's replacing him. >> another new zealander, ewan stevenson from credit suisse. he's an investment banker. he actually worked -- he should know rbs pretty well.
he worked on the bailouts in 2008. so he's probably -- he probably knows all the key details. >> okay. that sounds fair enough. george, good to speak to you. thanks for joining us. european financial editor at reuters breaking views. the hotel group says it will return $750 million to shareholders after the company's first quarter figures were boosted by the north america market. speaking first to cnbc earlier, the ceo said the outlook is pretty good. >> we don't sort of like to predict the future but i think we've seen steady growth. i think as in many markets, you've got winners and losers. we have very strong brands, very attractive to consumers, which is our real focus, get brands that are bringing people through the door. you'll see this gaining market share across the world. that is true in china and europe, as much as it is in the u.s. >> the german company, software
ag, sales down 7%. it expects fully operating profits to rise. the stock up 3.5%. and basf beat expectations despite currency head winds. on the analyst call, the cfo said they would continue to focus on organic growth because of high earnings multiples paid in recent industry takeovers. now, just in case you're wondering, it is jobs friday. the april u.s. jobs report due out at 8:30 eastern. economists expect hiring to expand at the fastest pace in five months. the consensus forecast, which is rarely right is for 215,000 in nonfarm payrolls. follows a rise of 290,000 in march. it will top the gains of 177,000 jobs a month. unemployment, the rate on that is seen falling back to 6.6%, which would match the five-year low we previously touched in january.
what do you think the jobs number will be? let us know. e-mail us, tweet @cnbcwex or direct to me @rosswestgate. we do a sweepstakes every month on the show with the producers and everybody else. i can tell you, i've never won it. in nearly 20 years, i've never won the nfp sweep stake. i can't remember what i called for this one. i think i said 230. anyway, there you go. there's no chance of that being the number. but let us know what you think. now, this indian politician was accused of breaking rules by taking a selfie with its party symbol. susan lee is in astana, kazakhstan for the asian development bank conference. she'll be speaking to the finance minister. i'm excited that we have a live shot out of kazakhstan, susan.
>> that's right. big hello from astana, the capital of the country. in fact, they're calling the capital of central asia. we are here at the asian development bank meeting, the 47th meeting. all the finance ministers are in attendance, the japanese foreign minister and the chinese foreign minister and the finance minister. people are talking about the elections here. it's expected now, given that we are in the seventh out of nine rounds of voting, it looks like the opposition party will possibly get a majority. that means they might be able to push through the reform changes that some say india desperately needs right now. it's not a good economic situation for the country. you are coming off a decade low of 4.5%. most economists we talked to say india with a population of 1 billion needs to grow at twice that rate at this point.
the the reason behind this is because they are expecting the opposition to come in to power with some sort of majority and hopefully will get to maybe some sort of reform agenda doing, narrowing the fiscal, the current account deficit and strengthening the currency as well. ross? >> not many people have been to kazakhstan, susan. what is it like there in the capital? >> yes. we just landed yesterday in astana. it is the capital. it's a makeshift capital. it's quite lovely. you have a few norman foster designed architectural designs out here, including the largest shopping mall in the city. if you want to stop by one day, i'm sure you're more than welcome, ross. but here in kazakhstan at the meeting, we're here to talk about risks to the global economy. we'll have a panel session in
just a few hours with the indonesian finance minister and the risk that they've highlighted for the global economy, not just for asia-pacific. they are looking at tapering from the fed, also right now the credit growth in china and some softening export figures. what does that mean for asia-pacific? we'll talk about all of this throughout the few days here in kazakhstan. >> susan, good stuff. thanks very much indeed for that. >> yes. >> good to see you. monday, cnbc will hear from bank of japan governor, harukiho kuroda. and did donald trump land a hole in one with his plan to buy turnber turnberry. ♪
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you're watching "worldwide exchange," bringing you business news from around the globe. the headlines from around the globe, sweetening the bid, pfizer tables 50 pounds a share for astrazeneca, valuing it at $106 billion. astra's board will discuss the offer. rbs blows expectations out of the water, a big jump in profit for the first quarter. shares up at the top of the london market. and reports of casualties roll in as kiev launches a
military operation to regain control in the east. the country's prime minister warns ukraine is entering its most dangerous ten days since independence. and the u.s. economy is expected to show one of the biggest gains in hiring in months for april with companies in all sectors putting out the help want signs. data oust the uk, the construction sector has grown for the 12th month in april. this is according to market and its pmi. albeit, it has come in at the slowest rate in six months. the construction pmi coming in at 60.8 versus march's 62.5. frankly anything over 6 is still strong. the poll was for it to stay at 60. the index has been above the 50 threshold. now for a full year. the best performing construction sector last month.
james butterfield is still with us. global equity strategist at kutz. rebound in construction, nothing was going on for a very long time indeed. house builders got quite bid well. >> house prices have been rising and there is, particularly in london, a real demand -- a real supply problem. demand is high. a lot of owners are not moving. they are purely upgrading their properties. it doesn't come as too much of a surprise to us. >> yes. as far as the house builders are concerned, one might think maybe we've had the best of it. i don't know. in stock prices. >> if you look at the stage we are at in the economic cycle in the uk, just coming out of a recession and we're just perhaps entering into an expansion rephase for the economy, then it would perhaps be wrong to say
this is the peak of the construction sector with perhaps further to go. >> james, stay there. we'll get more from you. meanwhile, let's remind you where we stand with the european equities right now. we've been flat today. caution ahead of the nonfarm payroll today. that forecast rise by 215,000 in april versus march's 192,000. right now, yes, flat. the cac current is down a third, the ftse mib up 0.5%. bond yields are con datained to as well. treasury yields 3.6%. we got down to the ten-year to 5.9. on the currency markets, again, not an awful lot ahead of the -- euro/dollar we hit yesterday a three-week peak of 138.90 and sterling hit a near five-year high against the dollar of 1.69,
which is below that at the moment. the u.s. jobs report for april is out at 8:30 eastern. the forecast is 250,000 in nonform payrolls following that 192,000 in march. all week on cnbc we have been asking guests for their predictions. take a listen. >> more than likely that nonfarm payroll number will come in a little better than people expect. the expectations are right around 200 and 225. the whisper on the treat and the floor of the exchange was 275 to 300. >> we are due a good headline report. actually, the last month's report was excellent on the household survey side. and that might bleed through to the establishment survey this time. so i wouldn't bet against it. >> all right. that's a couple of guests we've had on cnbc. james, what do you think? >> for us the magic number is is
200,000. that for us is a key point, while the u.s. in expansion territory economically. >> anything over 200. >> anything over 200 is for us. >> some people on the floor were talking about 275, you heard him say. a big blowout number. >> it can be quite volatile. it's better at nonfarm payrolls to look at a three-month trailing average, really. you can't rule it out. we'll be happy if it's over 200,000. >> someone made the point that first quarter gdp was just 0.1%. if you created 200,000 jobs on average, 170,000, 180,000 jobs on average, with a 0.1% growth, what will it be like? >> yes. this is the danger. i think the bad weather, the polar vortex in the u.s. has created problems. and there is potential for a down side. certainly if you look at corporate earnings you've seen that really evident. some sectors doing fantastically
well, such as the utilities sector which is the strongest performing sector year to date. also its earnings recover quarter on quarter by 50%. that's q4 2013 versus q1. that's because natural gas prices rose by 45% from year to date in february. and clearly they've been passing on the costs, hedging the energy costs and then passing on the costs to the consumer. the energy sector naturally has done very well as well. other sectors have performed badly. >> where do you think the leadership will come from now as we go into the summer months? >> cyclicals, definitely. certainly from a valuation perspective, cyclicals remain attractively valued, certainly in the materials and energy sector. for us, though, we think that the industrial sector is pretty punchy, also pricing in a lot of growth. it's unlikely that that will
leave. >> on the basis we haven't done very much this year, obviously we're in may. we like doing this in the media. we like talking about this theory. do you have a place on that, this year may be different? >> i don't think it's particularly credible if you look at the analysis on it. you haven't perhaps got enough data points really to make a judgment. all we've noticed is that it's a self-fulfilling prophecy. it's becoming more like that. each year, you see the sort of falls are more and more exacerbated which suggests it's something seasonal, something about investor psyche. >> it might be different. >> last year it was about bernanke and the announcement of the taper. this year, what are the risks out there? ukraine is one, that could prompt a sell-off if that escalates. >> james butterfield, have a good week.
good to see you. talking about the ukraine, these comments out from vladimir putin. a spokesman for him saying that kiev launched punitive operation in southeast ukraine and they hope -- killing the final hope to keep the geneva accord alive. these actions by kiev, according to the president's office killed the final hope to keep the geneva accord alive. putin spokesman says the person that sent his representatives to southeast ukraine for talks. more on that to come. barclays meanwhile is not named one but two people to replace the outgoing asia ceo robert morris. he oversaw the expansion and he's been in the role for the last 12 years. andrew jones and another person will start as co-ceos for asia-pacific on july 1st. donald trump clinched a deal
to buy turnberry in a cup price, 35.7 million pound cash deal. trump recently said he had no further plans to develop. the american business magnate plans to pump millions of dollars into the resort's hotel, which is flanked by three golf courses, as well as a spa. >> i know the owners of turnberry, they're friends of mine, terrific people. i've been talking to them about it for, you know, years. and we just struck up a conversation and decided to do something. i do well with this business. my clubs are very, very successful. >> linkedin meanwhile reported a first quarter net loss following costly acquisitions and expansion into china. cnbc's morgan brennan has more on the firm's numbers. >> lungedin reporting earnings
once again beat the street. the social network for professionals logged a 38 cents per share nongap on revenue of $473 million, beating on both the top and bottom lines. investors were watching closely to see just how much that revenue had increased since last year. in this case, 46%, marking a slowdown in the rate of growth but still better than analysts expected. unlike its fellow social companies, facebook and twitter, the lion's share didn't come from advertising. instead, it's the site's job recruiter platform, talent solutions. that made up more than 58% of revenue in q1, followed by marketing solutions, linkedin's advertising unit and premium divisions. while the quarter was a welcome surprise, guidance for the full year came in shy of consensus estimates. that sent the stock lower in after-hours trading. the company reported a net loss of $13 million, largely due to its expansion in china.
where it launched its beta site, simplified chinese in february. on the call, the ceo seeing the first quarter results reflected a strong memberment engagement. reiterating that in april, linkedin's membership topped 300 million, with one third of that in the u.s. back to you. >> meanwhile, kraft foods is announcing. they will be raising prices for cheese, bacon and cold cuts. kraft foods stock down 1%. still to come, is japan's shinzo abe's arrowheaded
straight for its target or will it miss? we'll have the latest from asia. ♪ [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.
you're watching "worldwide exchange." the recent book by michael
lewis, "flash boys" has stirred up controversy between exchanges and high frequency traders. the protagonist in the book went on to start his own exchange called the iex platform. as eamon javers reports, he's seeing a backlash. >> cnbc obtained copies, request s trades to be directed one way. the clients worried about high frequency trading getting ahead of their deals asked their brokers to route those. here's what fidelity said, we are unable to honor your request. we asked the regulatory agency
that overseas all of this what they think about it. we were told that the rules require brokers who get written requests to route those trades to the exchange or venue of the customer's choice. we talked to both scott trade and fidelity about this. both of them said they are following the finra regulations that apply to them. both of them said they're not doing anything wrong. a lot of attention surrounding this iex trading platform. there's a small minorities of customer who want their orders routed there, whether or not they're getting the best price and execution. back to you guys. >> eamon javers on that. annual spending slowing in japan. household spending was up 7.2% year on year, this as consumers rush to beat a sales tax hike in april. the prime minister consumer
spending isn't decreasing as much as had feared. japan's adjusted jobless rate came in at 3.6% in march, unchanged in february. the availability of jobs hit their highest level in nearly seven years. joining us with his thoughts, managing director and head of research at orient research and markets. thanks for joining us. >> yes. >> this household spending search, is that a good thing or a bad thing? clearly there was an impact from the hike in consumption sales tax. makes me wonder what's going to happen in the next few months. >> well, we have obviously everybody expected this thing to happen, the front running for the v.a.t. increase. we have the april numbers for some of the large department stores. they don't look nearly as bad as some people had expected. out of the top five, two of the
top five are down about 7% to 8%. and the other three by about 10%. so that's much better, really, than had been expected. the really pessimistic assumption had been something like negative 20%. >> you don't think we've stolen a lot from the second quarter household spending? >> no, not really a whole lot, because there's a significant amount of, you know, ways in which people are making up for the higher prices they may have to pay because they're getting paid better. the average wage increases were very substantial in the wage round that actually ended in march. and the bonuses that were just announced, there was a nikkei newspaper survey on bonuses which are going to be the highest since 2004. and on average nearly 8% higher
than they were a year ago. so that will make up for the difference. a lot of bonuses in japan get spent for white goods. and it's, you know, that area in which i think we'll actually see a peckup toward the end of the second quarter. >> do you see signs they're slowly going to stop saving in japan then? >> could you say that again? i didn't catch that. >> are you seeing signs that perhaps this savings culture they've had is starting to loosen? their savings rate, it's way down from what it was 20 years ago. i think what happened there is that because of the persistent deflation and because of the very low interest rates, people were actually discouraged from saving. and that's a situation that we have to look at and needs to be addressed. i think the bank japan is on
target of addressing that properly. we saw a tokyo cpi of 2.7%. so that means that people are passing on the v.a.t. increases in prices. and as inflation is knocked out of the system, i think we'll have some very positive signals there. what needs to happen in japan, in addition to investment in labor, is business investment. that's too slow at this point. >> you have to wait a few months to see whether that happens. in the notes i have from you, you say japan is in better shape than the u.s. for now. if that's true, why? >> well, it's true because the actual pickup on the labor front is very, very encouraging, much better than the u.s. it's in areas which, you know, of higher wages in the u.s., a lot of the jobs that happened have created since the great recession are in the retail
sector and some of the health care sector, et cetera, helpers, basically. and you know, that's a very big difference. japan, as abe said in london, japan needs to create more productive jobs. that goes in spades for the united states. the other thing is, japan is actually doing labor reforms, doing fiscal reforms in the united states. that's only the fed pumping in money in japan. arrow two is fiscal spending that's been done and arrow three is slow but it's actually picking up speed. i think we will always see that in asia. that's a trialed error situation. there won't be any big bang type of arrow three type of approach. but it'll come. it's happening. we are optimistic about the third quarter of this year. >> yes.
when you look at the small business, surveys of small businesses, though, they're still fairly pessimistic. that's going to be such a key component of getting investment in and creating more jobs and wages. when do you think they're going to turn around in their confidence and feed into the wider economy, if indeed, they do? >> that's a persistent problem in japan. this has been a problem for decades. and the basic reason there is overregulation. there has to be something drastically done. here we need a big bang. we need deregulation of the small business sectors. we can't have a situation where there's only x amount of taxes and such and such square kilometers or radius where you have only so many retail shops allowed. a lot of things of that nature that make it very, very difficult for smaller businesses
to thrive. and i think abe and his government understand that. but this is a hard thing to do in japan, to deregulate an economy that's been thriving on regulation for such a long time. >> good to see you. have a good evening. have a good week. thanks for joining us. >> thanks a lot. >> no problem. on monday, we'll hear from the bank of japan governor, haruhiko kuroda. as for the agenda away from that next week in asia, the chinese premier, li ching arrives in afric africa,. don't forget, it's a holiday in thailand, japan, korea and
also the uk. meanwhile, the malaysian government has released the preliminary report on the missing flight 370. it's only deepened the mystery. questions have now been raised on what took so long for the rescue missions to be launched once the plane went missing. nbc's tom costello reports. >> reporter: malaysia airlines are telling the family members of the missing to leave their hotels and return home to await more news. the five-page report provides a time line of events and it raises new questions about what took so long to launch a search for the plane after it was reported missing. >> malaysian 370. thank you. >> reporter: for the first time we're hearing the voice from the cockpit as flight 370 communicated with malaysian controllers. >> 370, kuala lumpur. 13269. >> reporter: family members have also heard the recordings. we don't know if it's captainza
h -- the captain or the co-pilot. >> malaysian 370. >> malaysian 370 contact ho chi minh 120.99. >> reporter: at 1:21 a.m., the plane disappeared from radar but not until 1:38 a.m. did vietnamese controllers tell malaysia the plane was missing, then another four hours before the malaysian search and rescue center was activated. far too long, say safety experts who insist searchers would have been launched far sooner in the u.s. >> i think when you dissect that four-hour delay, that could be the difference of finding this airplane and not finding this airplane. >> reporter: it took another three hours before the malaysian military reported it had tracked the plane, making a u-turn. search coordinators believe by then flight 370 may have already
been in the southern indian ocean. family members want ans. >> why is that? who is responsible for it and who makes a decision? >> reporter: also tonight malaysia released the cargo manifest for flight 370. along with the luggage the plane was carrying 10,000 pounds of fruit and 5,400 pounds of consolidated freight, which included lithium ion batteries. the documents note a flammability hazard exists if the package is damaged but the shipment was in compliance. eight weeks later, searchers haven't spotted a single piece of wreckage. the malaysian government will push for new standards that all commercial aircraft be satellite track realtime all the time. a developing story out of seoul, south korea. two subway trains have collided at 3:22 p.m. local time. there are no reported deaths but officials say more than 100 passengers have been injured. witnesses say one train was
leaving a station when it was hit from behind by an incoming bound train. one subway car was derailed as a result. most of the injured appear to be walking wounded, they report. this comes three weeks after a ferry capsized, the country's worst disaster in 20 years. still to come on "worldwide exchange," will cash be king? pfizer is raising its bid for astrazeneca and it includes more green. but will it be enough to entice the shareholders? we'll have more on that in the next half of "worldwide exchange" as well as a countdown to the nonfarm payroll report as well. see you in a few moments.
astra's board will discuss an offer from pfizer. rbs blows expectations out of the water, a big jump in profit. shares at the top of the market in london. reports of casualties roll in as kiev launches a military operation to regain control in the east. the country's prime minister warns ukraine is entering its most dangerous ten days since
independence. and the u.s. economy is expected to show one of the biggest gains in hiring in months for april. with companies in all sectors putting out the help wanted signs. you're watching "worldwide exchange," bringing you business news from around the globe. if you've just joined us in north korea, welcome to the start of a global trading day here on cnbc's "worldwide exchange." we're counting down to the nonfarm payroll. before that, pfizer has raised its bid for astrazeneca to $106 billion or 50 pounds a share. the new offer has a larger cash component as well. astrazeneca's replied saying it will meet today to discuss that new offer. katherine boll joins us in studio and we have a
pharmaceutical analyst joining us on the line from liverpool. savras, thank you for joining us. we're at 50 pounds a share. how high do you think pfizer has to go if they want to buy this company? >> that's the million dollar question. clearly, they've made a significant step today with the bid increase to 50 pounds per share. and you know, the mix of paper compared to cash is now 68% paper. and 32% cash. which is a step along the way. and in our view and obviously m&a of this magnitude and scale is very complicated to achieve. but in our view, you know, this is only a second bid. we expect at least one more.
and whether they are able to push upwards of 55 pounds as we've indicated this morning in our research, you know, we expect certainly one morbid. >> katherine? >> sarvas, that 55 pounds is probably right at the top of what analysts are forecasting for this bid. why do you think -- more people are coming in at 52, 53 mark. why do you think 55 is likely to be the magic number? >> we think that you know, obviously we examine the motivation of pfizer to do this and with any m&a transaction, there's obviously strategic motives, financial motives, obviously political motives that might be involved and emotional motives. we believe that on all these counts, you know, pfizer will be under some considerable pressure to get this deal achieved.
and, in order to do that, you know, certainly increasing the indicative bid from january by 7%, which is what they've done, you know, is probably not quite there. you know, with any possible m&a transaction, it really all goes down to what the shareholders of one company think shareholders of another company are gaining. and in our view, this bid of 50 pounds, as we outlined in our note this morning, is probably giving astrazeneca shareholders roughly about 50% of the value of the synergies. very clearly, you know, pfizer, given the fact that it is gone public with this in a hostile way, would probably be forced to go, you know, towards giving
more of those capitalized synergies back to astrazeneca shareholders. getting that extra 5 pounds of capitalized synergies is something they may be required to do. >> good to speak to you on the phone. thank you for joining us. clearly, he's expecting a third bid to come in, around the $55 mark. what's the attitude of the establishment in the uk to this bid from pfizer? >> it was quite interesting, ross. they seem to be quite split. the uk government itself, the conservative party wing of it seems to be quite pleased. they feel like they've won some concessions with pfizer committing to keeping 20% of its r & d jobs in the uk after this deal and of course to fulfill astrazeneca's promise to build this center in cambridge. there are a lot of people attacking this from the
government, from the lib dems. the labor party has been strident on this already and may get more so. having said that, that's interesting given that part of the reason pfizer is attracted to the uk in the first place is the patent box tax which was initially brought in under the previous administration. >> thank you. plenty more of course on katherine is writing that up for us. don't miss out on that. meanwhile, it's all about the jobs as well today. out of the u.s. ahead of that right now, futures are calling us slightly higher at the open. depending of course on what happens with this number, it comes out at 1:30 -- sorry, 8:30 eastern. that's 1:30 london time. the economy is expect to expand at its fastest pace in five months. consensus forecast is for an increase of 215,000, following a rise of 192,000 in march. it would surpass gains for the
first quarter. unemployment rate, that's seen falling back to 6.6%, it would match the five-year low that we previously touched in january. that's the consensus. joining us as ever on jobs friday, director of economic research at kohn resnick. >> i'm expecting 225,000 increase in nonfarm jobs, 215,000 of those in the private sector. your summary is very much along the lines of where we are. i think it's good to remark that last month for the first time since the recession began private employment in the united states is higher than where it was pre-recession. we're at a record private sector high. in addition to that, we saw for the first time in the first quarter, first time since 2008 stabilization, a little uptick in labor force participation. parps rate. that's also a positive.
and as a result we see positive movement in the sentiment of both the business and household sectors. >> do you think the pace of the recovery then is going to quicken now over the summer months, patrick? >> yes. that's our expectation. we really do think that the bottom is in, that the momentum is gathered at this point. we're looking at jobs growth to gradually accelerate through the remainder of the year. >> what happens to the participation rate, therefore the unemployment? we're saying the unemployment rate will tick down. you say the participation rate will go up. i'm wondering how that then feeds through. >> the rise in the participation rate may be the most significant untalked about story in that first quarter because it has been so long since we've seen it. my own expectation, we don't want to split hairs. but i think as the participation rate goes up, what we're going to see is a significant rise in
the number of re-entrants. it is likely, maybe 50/50, maybe a little bit above that, it's likely the unemployment rate may tick up for a virtuous reason, that is to say previously discovered job seekers have come back into the market. >> we'll get a pickup as you say in the pace. where are we going to be creating the extra jobs? where is that pickup going to be focused? >> there has been a broadening of the jobs gains distribution the past couple of months. so i wouldn't look to any one industry to take the lead. manufacturing from our perspective does look like it's ready to grow at a much faster pace than over the past two quarters. construction jobs have been up steadily. the private services providers have been where the real growth is. temporary help has added a couple hundred thousand jobs over the last year. but i think in the private service providers, we lack for a broad across the board set of
gains. >> what happens now with -- you talked about we'd get an additional 15,000 government workers. are we at the point where we might get your net/net public workers now starts increasing? >> i think so. revenues at the state and local level have not only stabilized, they are up relative to where they have been even prerecession. the gains are not as fast in the most recent quarter as they have been. that has provided both state and local governments with some additional resources to fill in positions they had to cut during the downturn. >> pat, stay there. get a cup of coffee. we'll come back for a final thought from you fairly shortly. patrick o'keefe. thank you. get in touch with us, wide
5:11am tweet us @rosswestgate. let's take a look at some of the other stories today. the s.e.c. is reportedly probing whether hedge funds may have acted unproperly when they made bets on herbalife last year. reports say the s.e.c. is investigating which hedge fund managers attended a so-called ideas dinner last year and what was said about herbalife shortly before a group of funds took long positions. no one has been accused of any wrongdoing. an fda advisory panel is expected to vote on whether to recommend the agency, approve
merck's asthma drug, singulair. an over-the-counter version could generate up to $1 billion in sales every year and could be a big asset in merck's consumer health business which is up for sale. merck's stock up nearly 2% in frankfurt today. and berkshire hathaway is buying canada's ultalink. it's a yaw tilt company, more than 280,000 substations and 7,000 miles of transition lines. it serves 85% of the population. it will continue to operate as a separate company under berkshire and be headquartered in calvary. still to come, kiev has launched a military operation in
eastern ukraine that's ignited the anger of the russian president vladimir putin. more details within we come back.
you're watching "worldwide exchange." the headlines, pfizer ups the ante on its bid for astrazeneca, makes pledges on jobs to the british prime minister.
kiev launches a military campaign against pro-russian separatists to regain control of ukraine's east. and investors around the world wait to see if april will shower the market with a strong u.s. jobs number. global investors looking ahead to the nonfarm payrolls report, expected to create an average of 250,000 -- 215,000 jobs in april. ahead of that, future s a tick higher. the markets post the numbers coming out at 8:30 eastern. the dow down 21 points. we snapped a three-day win streak. so cautious today ahead of that. this is where european markets are trading currently at the moment, fairly flat for both the ftse and the xetra dax. absolutely flat, off 0.25% for
the cac current. there are individual stocks worth looking at. rbs shares, the top performer today in the uk. stock up nearly 9%. net profit trickling in the first quarter hitting 1.2 billion pounds, much better than analyst estimates which had been around the 200 pound mark. the tier one ratio also improved. as far as asian markets are concerned, a mixed session. china still closed for the holiday, returns on monday. aside from that, the nikkei down 0.2. up 0.1 for the hang seng, the kospi down 0.1%. 0.2 for the australian market as well. the bond markets, 30-year treasury yields, 3.39% is where we hit. we just bounced off that with a yield of 3.4. ten-year treasury holes down at a two-month low during the thursday session. just above that, ahead of the employment, 2.62 is where we
stand. on the currency markets, the dollar index this morning was kicking off around a three-week low. euro/dollar still contained, 1.3859. the peak we hit was 1.3890. dollar/yen currently at 102.44. ukraine is the country's military forces launch a large operation to regain control of the eastern town of slovyansk. reuters sources say pro-russian sources have shot down at least one attack helicopter, killing the pilot. in response, russia president putin has kiev has killed the final hope of keeping the geneva accord alive. this according to a spokesman who says putin is sending a representative to ukraine for talks. mean while, the german chancellor, angela merkel has called vladimir putin to urge him not to interfere in ukraine.
she reportedly asked for the russian president's help to secure the release of the osce members being held by rebels. merkel said to discuss the crisis further when she meets with president obama in washington later. and neighboring poland seems to be taking an economic hit from the unrest. data shows manufacturing expansion slowed to its lowest level since last summer in april. and bund yields have also been down to their lowest level in nearly a year. investors see that as some of a safe haven. the chinese government is blaming extremist s for a bomb attack that killed three and injured many on wednesday. the three dead include the two assailants who according to the regional government had long been involved in extremist religious activity. the attack is seen as being timed to coincide with a visit
to the region by the president xi jinping. a suspected car bomb er injured 9 and killed 60. no group claimed responsibility for the attack. it comes days before the world economic forum in africa is due to begin. a developing story out of seoul, south korea, two subway trains collided at 3:22 p.m. local time. there are no reported deaths in the incident. officials say more than 100 passengers have been injured. witnesses say one train was leaving a station when it was hit from behind by an incoming car. one subway car was due out as a result. most of the injured appear to be walking wounded according to reports. this comes after a ferry capsize
ed, leaving 220 dead or missing. cost cutting measures, the food giant kraft posting higher earnings. we'll look at that. as we go to the break, a reminder that we're weighted to the upside for the european equities on the dow jones 600 heat map. foghorn sounds loudly ♪ here's a good one seattle... what did geico say to the mariner? we could save you a boatload! ♪ foghorn sounds loudly ♪ what's seattle's favorite noise? the puget sound! ♪ foghorn sounds loudly ♪ all right, never mind doesn't matter. this is a classic. what does an alien seamstress sew with? a space needle! ♪ foghorn sounds loudly continuously ♪ oh come off it captain! geico. fifteen minutes could save you fifteen percent or more on car insurance.
ahead of the employment report, u.s. futures indicating a tick higher. but it will all be changed by whatever happens with that employment report. we'll get more into that in the next part of the program. right now, there's more corporate news to get through. we've had earnings out from intercontinental hotels group which says it will return $750 million to shareholders. the hotel operator's ceo said the outlook is pretty good. >> we don't like to predict the future. i think we've seen steady growth. i think as in many markets you have winners and losers. we have very strong brands, attractive to consumers which is our real focus, get brands that bring people through the door. you're seeing a gaining market
share across the world. >> linkedin reported a net loss after a costly acquisition. the professional social networking site beat analyst forecast as revenue rose 46%. membership was up 7% which was the same growth rate as the last quarter. the linkedin is forecasting full-year revenue growth that's below analyst estimates. shares as a result down 3% after hours and in frankfurt, they're up 4%. kraft foods meanwhile was hit by a mysterious velveeta shortage in recent months that didn't stop the food company from reporting higher first quarter profits. cnbc's dominic chu has been breaking down the numbers. >> reporter: kraft, the company behind oscar meyer lunch meats, planter's nuts and jell-o reported 85 cents a share,
beating the 76 cents that wall street was expecting. sales fell short of estimates, that's $4.36 billion versus average analyst estimates of $4.45 billion. now, kraft attributed some sales weakness to the timing of shipments due to the easter holiday season. one bright spot for the company was cheese. yes, cheese and cheese products like velveeta. net revenues for cheese products rose from the same time last year, thanks mostly to price increases. ceo tony vernon said they're confident that a focus on things like brand renovation and cost management will help drive profit growth in the future. back over to you guys. >> dominic chu with a breakdown on kraft foods. european equities right now, we're mixed a little bit. the ftse 100, xetra dax is flat, down a third percent for the cac current. the ftse is down 0.5%. we have a bond board here. the spanish bond yields, i don't know if they're on here either.
spanish bond yields down below 3% for the first time in nine years. there we go. spanish ten-year government bond 3%. it dipped below. that was the first time for nine years that has happened. we have an ecb meeting coming up next week as well. meanwhile, still to come on the program, j. crew on the cheap. more on the retailer's concept for the budget conscious. as we do that, we'll be getting more on what's gung on with the jobs report for the month of april and how the numbers might impact politics and the midterm elections. ♪
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this is "worldwide exchange," a recap of the headlines today. sweetening the bid. pfizer tables 50 pounds a share now for astrazeneca which values it at $106 billion. astra's board is discussing the offer. rbs meanwhile blows expectations out of the water, a big jump in profit, shares at the top of the london market. reports of casualties roll in as kiev launches a military operation to regain control in the east. the country's prime minister warning ukraine is entering its most dangerous ten days since independence.
plus the u.s. economy is expected to show one of the biggest gains in hiring in months for april. the companies in all sectors putting out the help wanted signs. you're watching "worldwide exchange," bringing you business news from around the globe. and if you just joined us this morning, welcome to your trading day here on cnbc and "worldwide exchange." it's going to be really all about the jobs number before we get doing today. ahead of that, the futures are indicating a slight tick higher but it will all change at 8:30 eastern. the forecast is for an average of 215,000 nonfarm payroll jobs to be created for the month of april. european equities ahead of that have been a little bit firmer and mixed. the ftse global 300 is absolutely flat at the moment, mixed in asian trade. very flat at the moment for the
ftse 100 and the xetra dax as well. the cac current in france has offered a third of a percent. the micex in russia down 0.5%. what exactly are we going to get from this report? the average forecast is for 215,000 jobs to be created from 192,000, which is what we got in march. the unemployment rate, that's forecast to dip down to 6.6% from the march jobless rate of 6.7. now we'd also seen an average, of course, over the last three months of 177,000 jobs. we'll see what the new average will be, of course, coming up over the next three months. but there is an expectation that the pace of hiring will pick up. all weekend on cnbc we've been asking our guests for their predictions for this number. >> more than likely that nonfarm payroll number will come in better than people expect. the expectations are around 200 to 225. the whisper on the street and on
the floor was 275 to 300. >> we are due a good headline report. actually, last month's report was excellent on the household survey side. and that might bleed through to the establishment survey this time. so i wouldn't bet against it. >> joining us with more from washington, d.c., financial reporter at "the washington post," a cnbc contributor and still with us as well, pat o'keefe from kohn resnick. thanks for joining us. there's a consensus, 215,000. we haven't had a number over 200,000 this year. how important would that be? >> it would be very important. what we're really looking for today is reassurance that the economy did pick up, that the spring bounce back is here. we saw terrible first quarter gdp number. in fact we might even see that that number is revised downward so it's even worse than we thought. we're looking for some sign that
things are getting better, we're moving in the right direction and that the fed made the right decision when it decided to continue its taper. >> yes. how does -- i mean, the jobs number obviously very important as far as the fed is concerned. how do you see that playing in? >> well, the qe, the fed's quantitative easing program is tied explicitly to the health of the labor market. if we see a good payroll number, a strong print today, the fed can say, look, the employment market, the labor market is clearly getting better. and so, therefore, the reduction of our support for the u.s. economy is justified. however, i will remind you that new york fed president bill dudley has said that one reason for changing course on the taper could be if the economy stops growing or if it grows at a rate of 5% or more he was trying to create extreme examples of economic scenarios in which the fed might have to act. after the q1 gdp new, that scenario might not be so far
fetched after all. >> patrick, do you see anything that might blow this off the expected course? >> no. i think the first quarter gdp number, we were all looking for the economy to take a nap. it in fact took a coma. i think the underlying momentum of the economy right now is forward. within we look at the sentiment gauges, the measure of the outlook of households and businesses, they are increasingly confident of the sustainability of the expansion. >> interesting, yesterday we had that lower than expected rise in construction spending. that might mean the gdp gets revised even lower. you're already saying we don't -- that's history and we don't care about it. >> yes. i think that when we look at what happened in the first quarter, we had the weather, we had uncertainty, a decline in exports, overall private investment fell off. those appear to be one off
events and underneath all of that is still the more positive momentum of the economy. >> yes. how does that play into the issues of the midterms we're going to get? >> yes. well, if we see a strong second quarter as many kmekt to see, that would give democrats a real boost going into the midterm elections. there has been some economic modeling of election outcomes by yale professor ray fare that says democrats are projected to take over a slim majority in the house. that being said, the economy is no longer the defining issue in washington that it once was. t- ther party is talking about anymore. they haven't for a while. en stead you're hearing them turn to more longer term issues. so, for example, democrats are talking about raising the minimum wage or gender pay equity. where you hear republicans talking about tax reform, things
that might make a difference in the long run but are not focused on short-term boost to the economy. >> we shouldn't be expecting too much in the way of sort of big policy debate then? or meaningful policy change. >> yes. i mean, you haven't seen a lot of meaningful policy change in washington for quite a while. certainly the economy will still be in the discussion but it's foot a divisive issue anymore. you're already hearing sort of the ways we might hear the economy talked about in 2016. bill clinton gave a speech this week where he talked about the prosperity of the 1990s and how he helped usher that in. that can be laying the ground work for a potential hillary clinton run in 2016. instead of them talking about what's going on in the economy now, you hear them harkin back to the good old days, the golden years of a way of enticing voters and getting them riled up as opposed to focusing on near-term policy issues.
>> there's been a lot of talk from this administration and others around the globe, we have to do more to support smaller companies. they're the job creators and the drivers of growth. are the small businessmen, the smaller companies, now hiring or not? >> it appears that they are. when we looked at the reports from adt yesterday, what we did see is that the smaller companies are hiring the indicators again, the surveys of small businesses indicate they're hiring but doing so cautiously. they don't want to get too far ahead of where the economy is, but they are confident that in the near term, they can justify a higher payroll count. >> thanks for that, patrick. good to see you as always. leanne, thank you as well. financial reporter at "the washington post" as well as a cnbc contributor. i know it's early for both of you. we appreciate it. we're also asking you today, the viewer, what do you think
the jobs number will be? #stagnant. gary says he sees u.s. nonfarm payrolls at 172,000. you're being pessimistic, folks. is there anybody out there that's more optimistic, e-mail at or twe tweet @rosswestgate. it's fragile. people talk about the fragile five. we looked ait. there are 34 emerging markets with elections this year. within we looked at them, we created a fragile 34. >> most of the acquisitions i've
seen. by the time you take the eye off the ball of both organizes to put it together, then you've tried to integrate cultures, nine times out of ten. i'm not sure that's correct. regularly we'll find that 2 plus 2 equals 3 or 3.5. >> spain and italy trading below the u.s. and uk yields in the five-year part of the curve, way below australian yields, way below norwegian, korean yields. over a one-year period we think probably yields will be unstable much below these levels. >> that final point, spanish ten-year yields now below 3% for the first time in nine years they have been this morning. some of the other stories we're following today, the s.e.c. is reportedly probing whether hedge funds may have acted improperly within they made bets on herbalife last year.
the s.e.c. is gathering if they failed to disclose they were working up as a group when they loined up against bill ackman's short bet on the company. the s.e.c. is investigating which hedge fund managers attended a so-call ed idea conference. no one is being accused of any wrong doing. general motors is back in the bankruptcy court today, seeking to temporarily halt lawsuits related to its massive ignition switch recall whilst a judge determines whether it should be held reliable. the recall has been linked to more than 30 crashes and 13 deaths. gm is asking the car to bar victims from suing it for certain damages that occurred before it filed for bankruptcy in 2009. gm's admitted to knowing about the problem as far back as 2001. and the court will also rule on whether gm committed fraud by not revealing the defects during its bankruptcy sale.
j. crew meanwhile is working on a new retail chain aimed at budget conscious shoppers. j. crew mercantile would offer items at prices closer to the retailer's outlet stores. j. crew has been scouting locations for the new chain and has signed a few leases. the company's private equities owners are preparing it for a possible ipo. still to come on "worldwide exchange," merck under the microscope. the fda voted within on of its well-known drugs. we'll have the details. ♪ [ male announcer ] when fixed income experts... ♪ with equity experts... ♪ ...who work with regional experts... ♪ ...who work with portfolio management experts,
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you're watching "worldwide exchange." and the headlines, pfizer ups the ante on its astrazeneca bid and makes pledges on jobs to the british prime minister. kiev launches a military campaign against pro-russian separatists to try and regain control of the east of ukraine. and investors wait to see if april will shower the market with a strong u.s. jobs number.
malaysian officials are current i holding a press conference on missing flight mh-370. they say the families are going to receive a compensation package. this is after they say the search is entering a new phase. i think they've also reportedly suggested that the families of the passenger from missing flight 370 should be returning home. meanwhile, an unmanned vehicle will also be used in the search as well. back to corporate news. it could be a big day for merck. an fda panel gets set to weigh in on the future of one of the company's well-known drugs. the details, one person has it all for us, bertha is at cnbc hq in the states. >> we've seen a lot of allergy medication go over the counter which was once prescription. today an fda advisory panel is expected to weather to vote if they will approve singulair for
an over-the-counter allergy medication. it came off patent protection in 2012 and contributes just a fraction of what it used to. an over-the-counter version may generate between 500 million and $1 billion in annual revenue. that would have no patent expiration at all. however, the fda has expressed some concerns over singulair's safety in an over-the-counter setting which is less regulated. but if it is approved, singulair could become a big asset for merck's consumer health care business, which the company has put up for sale and includes other allergy medication such as claritin. reports say germany's buyer is closing in on a deal to buy the unit for about $14 billion. on wednesday, another possible bidder, said it was no longer in the running. they could announce the transaction in the next few days. shares in frankfurt at this hour, they're trading up, a bit
over 1% at the moment. back to you. >> bertha, thanks for that. good to see you. >> you, too. >> thank you. in earnings news, linkedin reported a net loss. excluding items, the professional social networking site beat analyst forecasts as revenue rose 46%. membership rose 7%, the same growth rate as the fourth quarter. linkedin is forecasting full-year revenue growth below analyst estimates. shares in linkedin today currently up, 4% in frankfurt. they were down heavily after hours in the united states. kraft foods has reported higher first quarter profits helped by cost cuts and moves to manage prices for key ingredients. revenue fell which missed analysts forecasts. kraft will be raising prices for nearly half of its products, including cheese, bacon and cold cuts as it trays to offset a spike in commodity prices.
kraft foods stock in frankfurt off around 1%. that's all going to be about of course what happens with the employment report a little bit later today. ahead of that, futures are indicating a tick higher at the moment. but it could all change. we'll get the look ahead from cme when we come back, right after this.
we're getting reports of casualties in eastern ukraine as the country's military forces launch a large operation to regain control of slovyansk. reuters sources say pro-russian separatists have shot down at least one attack helicopter, killing the pilot. in response, the russian president vladimir putin says kiev has killed the final help of keeping the geneva accord alive. this according to a spokesman who says putin is sending a representative to ukraine for more talks.
this all comes as the german chancellor angela merkel has called on vladimir putin to ask him not to interfere in ukraine. she's also asked for the president's help for the release of the osc members being held by the rebels. merkel is set to discuss the matter further when she meets with president obama later. we have more news out concerning pfizer's bid for astrazeneca. we know pfizer upped the bid to around 50 pounds a share, which would value the firm at $106 billion. astrazeneca has been discussing that bid this morning. they've just come out and said no deal, basically. no deal with pfizer on a 50 pound a share bid. astrazeneca stock at the moment currently down 29 points, which is about 0.6%.
there will be an expectation that pfizer comes back with a third and potentially final bid. the board had no hesitation in rejecting this 50 pound a share bid. and shareholders are strongly advised, the fidz pfizer board to take no action. they may have to go up to 55 pounds a share if they want to approve it to shareholders. that's the latest pfizer's 50 pound a share bid for astrazeneca rejected by the board, fairly conclusively. meanwhile, european equities today, a little bit flat as you can see. the ftse 100 and the cac current. on the agenda, meanwhile, the united states, we have the april jobs report. besides that we also have march factory orders, due out at 10:00 a.m. eastern. just a few earnings of note,
chevron, the drugstore chain, cvs caremark, estee lauder, newell rubbermaid and berkshire hathaway. futures are indicated higher and the jobs number is suggesting that -- there we go, jobs number suggesting out at 8:30 that we'll get the fastest pace of hiring in five months. consensus for an increase of 250,000 nonfarm payrolls, following the rise of 192,000 in march. that would also top of pace of gains in the first quarter of 177,000 jobs a month. the unemployment rate seen ticking back to 6.6%, matching at five-year low, previously touched in january. joining us with his thoughts, ben lichtenstein, live from the cme. always good to see you. what's the whisper down there? >> good morning. >> what's the number if we don't get we'll be disappointed? >> well, the disappointed number
would be anything below the 177 level, 150 level. again, we need to see something in the 200 level to see anything with any real umph, if you will. that will be the first time we've seen 200,000 plus for 2014. this market right now is really just kind of hanging here, waiting. there's been so much information this week for the market to digest in terms of data and earnings. economic releases. this is really just the cherry on the top, if you will, right now. but this market has had a lot to digest in terms of information. for the most part if you look at the s&ps, going into the close yesterday, very well bid. not on the all-time highs but just a matter of a couple handles off for the most part. the real thing to keep an eye on here today in the coming couple weeks is how the nasdaq and the russell handle this situation that they're in right now. we're seeing a major divergence developing between the s&ps and the dow, which are holing upper levels in near all-time high presents and the divergent
markets are the russell and the nasdaq. those two are at levels -- lower levels, not seeing this bid activity that we're seeing. the nasdaq, for example, is trading at its january 23rd levels. you've got the russell trading at its 2013 november 25th levels. so now if the s&ps coincide with the nasdaq right now, we would be trading 100 handles below where we're trading right now. we'd be trading around 18 even. there's a significance divergence at play. >> thanks for that, good to see you. have a good day. plenty more to come with that number on "squawk box." that's coming up next. whatever happens, we hope you have a profitable day. bye for now.
good morning and welcome to "squawk box." it's jobs friday. the market's gearing up for april and its big employment report. will nonfarm payroll top 200,000? i'm going to stay. i don't care. just moments ago, astrazeneca rejecting pfizer's sweetened $106 billion bid for the british drugmaker. and berkshire hathaway's annual shareholder meeting is about to kick off in omaha. warren buffett is talking more about coke. it's friday, may 2nd, 2014 and "squawk box" begins right now.
good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin and an under the weather joe kernen. joe, your voice, honey, i hope you're hanging in there. i am in omaha for the berkshire hathaway annual meeting. we got the chance to catch up with warren buffett and got some of his comments on the compensation issue. our lineup, we have the ceo from net jets, jordan hansel. mario gabelli is coming up at 7:15 and 7:40 a.m., activist investor david winters. also, matt rose, the executive chairman of the burlington northern santa fe railway. we have a big lineup, a lot of people to talk to this morning. right now, back to joe. he h